Notes, summaries, assignments, exams, and problems for Economics

Company Description

A company is an entity consisting of capital and labor as factors of production. It is dedicated to industrial, commercial, or service provision with a profit motive and carries personal or social responsibility.

Certification of Company Name

Request a name for your company from the Central Commercial Register. We recommend providing three options to ensure availability.

Procedures at the City Council

• Building Permit
• Activity Installation License
• Business License (payment required)

Procedures at the Ministry of Labor and Social Affairs

• Registration in the special scheme for self-employed individuals
• Company registration with Social Security
• Communication of workplace opening (number of employees)

Deposit of Capital

Open a bank account...

Types of Bank Deposits

Checking Account: A deposit account that allows for frequent transactions, typically used by individuals and businesses.

Savings Account: A deposit account designed for saving money, offering immediate availability of funds.

Term Deposits: Deposits held for a fixed term with a predetermined interest rate. The interest rate is typically higher than that of checking or savings accounts. Early withdrawal may be possible, but often without interest.

Functions of Money

Medium of Exchange: Used to buy goods and services.

Unit of Account: Provides a standard measure of value for all goods and services.

Store of Value: A way to store wealth, although its value can be eroded by inflation.

Demand for Money

People demand money for transactions...

The Washington Consensus

Principles of the Washington Consensus

• Fiscal discipline
• Reordering of public spending
• Tax reform
• Interest rate liberalization
• Competitive exchange rate
• International trade liberalization
• Liberalization of direct foreign investment
• Privatization
• Deregulation
• Property rights

WTO Scope

Factors governed by the WTO:

• Intellectual property
• Regulation of business and capital
• Benefits
• FTAs
• Economic integration
• Systems for business services, health, and education

Globalization: Advantages and Critics

Advantages of Globalization

1. Reduced global costs
2. Improved product quality and programs
3. Greater customer choice
4. More effective competitive offerings
5. Poverty reduction

Critics of Globalization

1. Benefits primarily the elite
2. Focuses on growth over equitable development
3. Seeks

Sources of Funding

These are the joint economic resources a company uses to finance its investments.

Self-Financing

This consists of funds originating from earnings retained from shareholders. It can be for:

• Enrichment: Aimed at growth (Reserves).
• Maintenance: Aimed at preserving capacity (Depreciation Funds and Provisions).

Enrichment Self-Financing

Reserves: This is a portion of profits not distributed to shareholders, reflecting savings growth used for new investments. It increases the company's assets and enables growth. There are three types:

• Legal Reserve: Established by law.
• Compulsory Reserve: Established in the company's statutes.
• Voluntary Reserve: Decided upon by shareholders in the General Shareholders' Meeting.

Maintenance Self-Financing

These...

Services are activities offered for sale.

Types of Services

Service highlights include:

• Banks and similar institutions
• All types of insurance
• Clinics, hospitals, and gyms
• Spiritual care services
• Rental services for private or industrial properties, apartments, and offices
• Transportation, storage, and communication services
• Classic business services: maintenance, cleaning, and information
• Freelance professional activities, such as architects
• Information management services: TV and film
• Hotel and restaurant services
• Marketing services, advertising agencies, and market research

Classification of Services

Nature of Service

• Depending on who or what receives the service:
  • Person or consumer: consumer services
  • Animal: veterinary services
  • Object: automobile repair
  • Company:

Sources of Enterprise Financing

Under property resources, finance distinguishes between own and external resources. The very purpose of financial resources is that they are owned by the company. These resources include the capital paid by the partners or the owner of the company. Profits are not distributed among the owners; instead, they remain in the business as reserves to cover financial needs.

External resources include all resources from persons or entities outside the company that generate a debt or obligation. These resources come from financial creditors for short and long terms.

Classifications of Financing Sources

Financing by Time Horizon

According to the time horizon of the company's resources, we distinguish between permanent capital...

Understanding Quality Costs: A Detailed Classification

Quality costs are expenditures incurred to ensure that products or services meet quality standards, or those that arise when they fail to do so. Understanding and categorizing these costs is crucial for effective quality management and overall business improvement. This classification breaks down quality costs into three primary categories: External Failure Costs, Appraisal Costs, and Prevention Costs.

External Failure Costs

These costs arise when products or services fail to meet quality standards and are detected after delivery to the customer. They directly impact customer satisfaction and brand reputation, often leading to significant financial losses.

Costs Related to Claims Processing

1. Returns of Capital

Under Article 21 of the Act, all capital gains or tradeoffs—regardless of their name, nature, or whether they are monetary or in-kind—derived directly or indirectly from assets, liabilities, or rights owned by the taxpayer are considered integrated performance, provided they are not involved in savings activities.

This includes:

• a) Returns from real estate, including rural and urban housing.
• b) Returns from movable capital.

12.1. Real Estate Capital Yields

These are incomes derived from the ownership of rural or urban real estate, or real rights pertaining to them, arising from:

• a) The lease of property or real rights.
• b) The creation or transfer of rights or powers of use or enjoyment of such properties.

Note: This excludes

Core Marketing Concepts and Definitions

According to the American Marketing Association (AMA), marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.

As defined by Philip Kotler, marketing is the art and science of managing profitable customer relationships.

Understanding Customer Needs, Wants, and Demands

• Needs: Basic physical, social, and individual human requirements.
• Wants: The specific form that human needs take, shaped by culture and individual personality.
• Demands: Human wants that are backed by buying power.

Value, Markets, and Management

• Customer Value and Satisfaction: The gap between customer expectations

Understanding Capital and Investment

To understand how an economy builds wealth, we must distinguish between Capital and Investment, which are often confused but represent two different dimensions of economic assets.

• Capital: Capital is a stock concept. It refers to the total accumulated quantity of physical, reproducible assets (such as machinery, factories, equipment, and inventories) existing in an economy at a specific point in time. It represents the productive capacity built up from the past.
• Investment: Investment is a flow concept. It is the process of adding to the existing stock of capital during a specific period (usually a financial year). It represents the net change in capital.

The relationship between the two can be expressed mathematically...